Freight and Transport Index in highest growth
Indicates that soon-to-be-released GDP number may show the strongest expansion yet
THE CTRACK Freight and Transport Index reached its highest growth in the third quarter, indicating that the imminent gross domestic product figure (GDP) for the quarter may show the strongest growth per quarter in our lifetime, Ctrack managing director Hein Jordt said yesterday.
In June, the Ctrack Freight and Transport Index showed that the logistics sector declined by 17.4 percent compared with the previous quarter, while the growth over the second quarter had improved by 11.8 percent.
Freight transport tracks the economy in near real time and has a close relationship with GDP.
“The Ctrack Freight Transport Index has been recording these trends for a considerable time and we have never seen such growth and recovery. This is, of course, why we now expect the strongest GDP on record for South Africa and many other countries too,” said Jordt.
According to the index, only two sub-sectors recorded a decline: pipelines, which is the smallest sub-sector, and storage, which was historically difficult to predict.
He said although the recovery might seem remarkable, it was off the low base of the previous quarter.
The effects of the second wave of Covid-19 were yet to be seen – at the moment, it seemed to have hit Europe the hardest. China had recovered and was growing strongly, while indications were that the recession in the US was not as bad as feared.
“We do expect some negative effects, but believe that they will not be as devastating as those of the first wave,” said Jordt.
The Ctrack Freight and Transport Index covers six sub-sectors in the logistics arena. They all behave differently during a worldwide crisis.
Air freight had the strongest quarterly recovery, mainly because it was the hardest hit during the lockdown.
The 22.5 percent quarter-on-quarter improvement was significant, but it was still down 33.9 percent compared with the same quarter last year.
No other sector was as severely impacted during lockdown, and Iata, the international commercial aviation body, expected the sector to recover to where it was last year by 2022 or 2023.
Sea freight grew 13.2 percent quarter-on-quarter, but it was still 6.1 percent behind the same quarter in 2019.
Rail and road recorded increases of 16 and 16.8 percent, respectively, compared with the previous quarter.
Although both major forms of land transport report disruptions, such as border delays and illegal strike action, they were both only 7 percent behind the same quarter last year. A complete recovery was only expected in a year’s time.
The recovery in the road transport sector might be due to the move towards courier-type transport. However, long-distance freight transport was at a similar level in September as it was in September last year.
There had been many strikes in September last year, which had also been a weak quarter for the economy.
The storage and warehouse sector indicated a draw-down on inventories in the quarter due to cost-cutting and supply disruptions and the decline of 7.7 percent in this sector indicated a level of uncertainty in the economy.
Pipelines reported the biggest decline at 38.7 percent quarter on quarter because of the storage of massive amounts of fuel during the second quarter.